Millions of Canadians are savvy online shoppers who have had very positive experiences online. Their expectations have been shaped by their previous experiences with best-in-class national or global merchants.
When it comes to business growth in Canada, understanding how to meet shopper expectations can go a long way to boosting your bottom line.
One area in particular that can’t be ignored is returns. The returns process has the power to exceed the customer’s expectations and lead to repeat purchases.
This makes return policies a balancing act for e-commerce retailers, especially when managing cross-border shipments. You want to enjoy the benefits of offering convenient customer returns, but you also need to manage costs. You’re walking a tightrope between the two needs and want to avoid any missteps.
Convenient returns drive conversions, reduce abandoned carts, increase average order values, and build customer loyalty – but they still come with potential risks. Make your returns process too convenient, and costs could grow faster than you’d like. Make them too restrictive, and you could pay the price in missed purchase opportunities.
For 47 per cent of U.S. cross border online shoppers, the ease of making a return is a critical factor in their decision to purchase.1
So, how do you strike a balance between the costs and benefits?
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How to reduce the cost of returns and keep customers happy
As a merchant, you can avoid absorbing the full cost of returns and keep customers content. It’s all about putting yourself in your customers’ shoes and thinking creatively.
Clarity and convenience are key
Research shows that Canadians want clear, simple and convenient online shopping experiences. H&M, for example, has a simple and straightforward returns process. Straight away, they let customers know:
- What can and can’t be returned
- How to return items
- How refunds are processed
- How to get in touch with customer service for assistance
Leading retailers in Canada follow similar strategies to ensure potential customers are equipped with clear expectations for returns.
62 per cent of Canadians would abandon a shopping cart if they had concerns regarding the return policy.2
It’s important to make your return policy easy to understand and easy to find on your website. It’s also becoming increasingly important to make it as customer-friendly as possible. A complicated return policy could cost you your next sale.
Managing cost and expectations creatively is also key
Here’s how savvy Canadian and U.S. businesses are managing customer expectations, protecting their margins and sharing the price tag of returned merchandise:
- Lower costs with a restocking fee: Instead of absorbing the full cost of shipping, shoppers may be open to a small deduction from the overall refund – a cost associated with handling a return.
- Boost retention with credits toward future purchases: Instead of a refund, shoppers are issued an online or in-store credit, providing a reason to return and shop.
- Keep it simple with a flat or discounted rate to ship returns: This tactic takes the sting out of the cost of return shipping. By offering a flat rate returns fee, the cost becomes less of an obstacle to purchase.
- Manage customer expectations with these adjustments: Here are some standard adjustment tactics businesses can use to deliver on customer expectations while lowering return costs:
- Communicate a clear return policy: Make your store’s return policy clear and accessible in order to manage customer expectations and reduce misunderstandings. This way, shoppers can make informed choices when placing their order, and if they choose to make a return, there will be no surprises.
- Encourage informed purchase decisions: In general, the fewer returns a business has to handle, the better. Provide plenty of product information, such as high-quality imagery, descriptions and measurements. This way customers can shop confidently and return merchandise less frequently.
Choose a shipping partner that makes it simple for your customer to return items
For a U.S. retailer with no physical presence, offering online shoppers more flexible return options can increase the likelihood of completed purchases. You’ll want a delivery partner who allows you to offer convenient return options, such as flexible drop points. With 90 per cent of Canadians living within three miles of a post office and having access to 22,000 Street Letter Boxes, offering flexible drop points makes it easy for them to make a return.
For 58 per cent of U.S. cross border online shoppers, inconvenient returns are a deal-breaker leading to abandoned carts.3
How you handle your returns is important for your business. Whatever tactic you choose, make your return policy clear, easy to find on your website, and as customer-friendly as possible.
1 2 3 Canada Post. 2019 Consumer Study, 19-203, August 2019.
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